Analysts Bernstein Research have said that while UK retailer Sainsbury's posted a 1.1% decline in like for like sales in Q2, the retailer's growth strategy appears to be working.
"Sainsbury's sources of growth are well diversified," Bernstein's Bruno Monteyne said in a note. "Strong growth in convenience of +7%, slightly better than the reported 'over 6%' in Q1. Online continues to show solid growth of +8%, in line with growth reported in Q1."
Monteyne added that General Merchandise showed growth of 4%, down from 5% in Q1, which was "due to a slight decline in clothing growth due to the weaker clothing market in Q2 but with continued market share gains".
Finally, Monteyne noted that the like for like sales decrease is likely due to price deflation. "Sainsbury's highlight their price cuts on 'everyday products that customers buy regularly'." he said.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
